The Returns At Wilmar International (SGX:F34) Aren't Growing

Simply Wall St.07-06

What are the early trends we should look for to identify a stock that could multiply in value over the long term? In a perfect world, we'd like to see a company investing more capital into its ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

BK99
07-29
BK99
Same old stories again and nothing new but always bringing companies down !!!

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2449241332?lang=en_US&edition=fundamental","thumbnail":"https://images.simplywall.st/asset/industry/5121000-choice2-main-header/1585186862101","is_english":true,"pubTime":"2024-07-06 06:01","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2449241332","market":"us","top_or_hot":-1,"title":"The Returns At Wilmar International (SGX:F34) Aren't Growing","media":"Simply Wall St.","content":"<div>\n<p>What are the early trends we should look for to identify a stock that could multiply in value over the long term?  In a perfect world, we'd like to see a company investing more capital into its ...</p>\n\n<a href=\"https://simplywall.st/stocks/sg/food-beverage-tobacco/sgx-f34/wilmar-international-shares/news/the-returns-at-wilmar-international-sgxf34-arent-growing\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>The Returns At Wilmar International (SGX:F34) Aren't Growing</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThe Returns At Wilmar International (SGX:F34) Aren't Growing\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-07-06 06:01 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/sg/food-beverage-tobacco/sgx-f34/wilmar-international-shares/news/the-returns-at-wilmar-international-sgxf34-arent-growing><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>What are the early trends we should look for to identify a stock that could multiply in value over the long term?  In a perfect world, we'd like to see a company investing more capital into its ...</p>\n\n<a href=\"https://simplywall.st/stocks/sg/food-beverage-tobacco/sgx-f34/wilmar-international-shares/news/the-returns-at-wilmar-international-sgxf34-arent-growing\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SG9999013460.SGD","symbol_name":"LionGlobal Singapore Dividend Equity Fund SGD","start_time":0,"source_url":"https://simplywall.st/stocks/sg/food-beverage-tobacco/sgx-f34/wilmar-international-shares/news/the-returns-at-wilmar-international-sgxf34-arent-growing","article_id":"2449241332","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/5121000-choice2-main-header/1585186862101"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2449241332","pubTimestamp":1720216898,"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"What are the early trends we should look for to identify a stock that could multiply in value over the long term? In a...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"SG9999013460.SGD":"LionGlobal Singapore Dividend Equity Fund SGD","BK6095":"农产品","SGXZ58947870.SGD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (SGDHDG) INC","SG9999002414.USD":"LIONGLOBAL SINGAPORE TRUST (USD) ACC","SG9999002406.SGD":"利安新加坡信托基金","SG9999014302.SGD":"RHB Singapore Income Fund SGD","SG9999006597.SGD":"United China-India Dynamic Growth SGD","SG9999000343.SGD":"Schroder Singapore Trust A Dis SGD","SG9999013478.USD":"利安新加坡股息基金","F34.SI":"丰益国际","SG9999013486.USD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (USD) INC A","SG9999016042.SGD":"Schroder Singapore Trust A Acc SGD","SG9999003826.SGD":"日兴资管新加坡股息基金 SGD","SG9999014492.USD":"NIKKO AM ASEAN EQUITY \"A\" (USD) ACC","SG9999002679.SGD":"LionGlobal Singapore Balanced SGD","BK6509":"食品和饮料股","SG9999014484.SGD":"Nikko AM ASEAN Equity Fund A SGD","SG9999004360.SGD":"Nikko AM Shenton Thrift Fund SGD"},"translate_title":"丰益国际（SGX：F34）的回报没有增长","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"F34.SI":1},"content_text":"What are the early trends we should look for to identify a stock that could multiply in value over the long term?  In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing.  This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns.    In light of that, when we looked at Wilmar International (SGX:F34) and its ROCE trend, we weren't exactly thrilled.     Understanding Return On Capital Employed (ROCE)  For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business.  The formula for this calculation on Wilmar International is:  Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.068 = US$2.2b ÷ (US$62b - US$30b) (Based on the trailing twelve months to December 2023). Thus, Wilmar International has an ROCE of 6.8%.  On its own that's a low return on capital but it's in line with the industry's average returns of 7.4%.   View our latest analysis for Wilmar International SGX:F34 Return on Capital Employed July 5th 2024 Above you can see how the current ROCE for Wilmar International compares to its prior returns on capital, but there's only so much you can tell from the past.  If you'd like, you can  check out the forecasts from the analysts covering Wilmar International  for free.  How Are Returns Trending?  There are better returns on capital out there than what we're seeing at Wilmar International.   The company has consistently earned 6.8% for the last  five years, and the capital employed within the business has risen 41% in that time.   Given the company has increased the amount of capital employed, it appears the investments that have been made simply don't provide a high return on capital.     Another thing to note, Wilmar International has a high ratio of current liabilities to total assets of 48%.  This can bring about some risks because the company is basically operating with a rather large reliance on its suppliers or other sorts of short-term creditors.   While it's not necessarily a bad thing, it can be beneficial if this ratio is lower.    What We Can Learn From Wilmar International's ROCE  In conclusion, Wilmar International has been investing more capital into the business, but returns on that capital haven't increased.       And investors may be recognizing these trends since the stock has only returned a total of 0.9% to shareholders over the last  five years.  So if you're looking for a multi-bagger, the underlying trends indicate you may have better chances elsewhere.      One more thing: We've identified   3 warning signs  with Wilmar International (at least 1 which is a bit concerning)  , and understanding these would certainly be useful.    For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity. Valuation is complex, but we're helping make it simple.Find out whether Wilmar International is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.Valuation is complex, but we're helping make it simple.Find out whether Wilmar International is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":332675601150152,"gmtCreate":1722247556649,"gmtModify":1722247560460,"author":{"id":"3582154836923956","authorId":"3582154836923956","authorIdStr":"3582154836923956","name":"BK99","avatar":"https://community-static.tradeup.com/news/135c1133415675c1298dfbb871606910","vip":1,"crmLevel":6,"crmLevelSwitch":0,"idStr":"3582154836923956"},"htmlText":"Same old stories again and nothing new but always bringing companies down !!!","listText":"Same old stories again and nothing new but always bringing companies down !!!","text":"Same old stories again and nothing new but always bringing companies down !!!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/332675601150152","repostId":2449241332,"repostType":2,"repost":{"id":"2449241332","pubTimestamp":1720216898,"share":"https://ttm.financial/m/news/2449241332?lang=&edition=fundamental","pubTime":"2024-07-06 06:01","market":"us","language":"en","title":"The Returns At Wilmar International (SGX:F34) Aren't Growing","url":"https://stock-news.laohu8.com/highlight/detail?id=2449241332","media":"Simply Wall St.","summary":"What are the early trends we should look for to identify a stock that could multiply in value over the long term? In a...","content":"<html><body><div><p> What are the early trends we should look for to identify a stock that could multiply in value over the long term?  In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing.  This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns.    In light of that, when we looked at <strong>Wilmar International</strong> (SGX:F34) and its ROCE trend, we weren't exactly thrilled.    </p><h2> Understanding Return On Capital Employed (ROCE) </h2><p> For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business.  The formula for this calculation on Wilmar International is: </p><p> <strong>Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)</strong> </p><p>0.068 = US$2.2b ÷ (US$62b - US$30b) <em>(Based on the trailing twelve months to December 2023)</em>.</p><p> Thus, <strong>Wilmar International has an ROCE of 6.8%. </strong> On its own that's a low return on capital but it's in line with the industry's average returns of 7.4%.  </p><p><span> View our latest analysis for Wilmar International </span></p><figure><img height=\"316\" loading=\"lazy\" src=\"https://images.simplywall.st/asset/chart/5467851-roce-1-dark/1720216896353\" width=\"333\"/><figcaption>SGX:F34 Return on Capital Employed July 5th 2024</figcaption></figure><p> Above you can see how the current ROCE for Wilmar International compares to its prior returns on capital, but there's only so much you can tell from the past.  If you'd like, you can  check out the forecasts from the analysts covering Wilmar International  for <strong>free.</strong> </p><h2> How Are Returns Trending? </h2><p> There are better returns on capital out there than what we're seeing at Wilmar International.   The company has consistently earned 6.8% for the last  five years, and the capital employed within the business has risen 41% in that time.   Given the company has increased the amount of capital employed, it appears the investments that have been made simply don't provide a high return on capital.   </p> <p> Another thing to note, Wilmar International has a high ratio of current liabilities to total assets of 48%.  This can bring about some risks because the company is basically operating with a rather large reliance on its suppliers or other sorts of short-term creditors.   While it's not necessarily a bad thing, it can be beneficial if this ratio is lower.  </p> <h2> What We Can Learn From Wilmar International's ROCE </h2><p> In conclusion, Wilmar International has been investing more capital into the business, but returns on that capital haven't increased.       And investors may be recognizing these trends since the stock has only returned a total of 0.9% to shareholders over the last  five years.  So if you're looking for a multi-bagger, the underlying trends indicate you may have better chances elsewhere.     </p><p> One more thing: We've identified  <strong> 3 warning signs </strong> with Wilmar International (at least 1 which is a bit concerning)  , and understanding these would certainly be useful.   </p><p> For those who like to invest in <strong>solid companies,</strong> check out this <strong>free</strong> list of companies with solid balance sheets and high returns on equity. </p><div><h3>Valuation is complex, but we're helping make it simple.</h3><p>Find out whether Wilmar International is potentially over or undervalued by checking out our comprehensive analysis, which includes <strong>fair value estimates, risks and warnings, dividends, insider transactions and financial health.</strong></p>View the Free Analysis</div><p><strong>Have feedback on this article? Concerned about the content?</strong> <strong>Get in touch</strong><strong> with us directly.</strong><i> Alternatively, email editorial-team (at) simplywallst.com.</i><i>This article by Simply Wall St is general in nature. <strong>We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.</strong> It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.</i></p><div><h3>Valuation is complex, but we're helping make it simple.</h3><p>Find out whether Wilmar International is potentially over or undervalued by checking out our comprehensive analysis, which includes <strong>fair value estimates, risks and warnings, dividends, insider transactions and financial health.</strong></p>View the Free Analysis</div><p><strong>Have feedback on this article? Concerned about the content? Get in touch with us directly.</strong><em> Alternatively, email editorial-team@simplywallst.com</em></p></div></body></html>","source":"simplywall_highlight","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>The Returns At Wilmar International (SGX:F34) Aren't Growing</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThe Returns At Wilmar International (SGX:F34) Aren't Growing\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-07-06 06:01 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/sg/food-beverage-tobacco/sgx-f34/wilmar-international-shares/news/the-returns-at-wilmar-international-sgxf34-arent-growing><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>What are the early trends we should look for to identify a stock that could multiply in value over the long term?  In a perfect world, we'd like to see a company investing more capital into its ...</p>\n\n<a href=\"https://simplywall.st/stocks/sg/food-beverage-tobacco/sgx-f34/wilmar-international-shares/news/the-returns-at-wilmar-international-sgxf34-arent-growing\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"https://images.simplywall.st/asset/industry/5121000-choice2-main-header/1585186862101","relate_stocks":{"SG9999013460.SGD":"LionGlobal Singapore Dividend Equity Fund SGD","BK6095":"农产品","SGXZ58947870.SGD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (SGDHDG) INC","SG9999002414.USD":"LIONGLOBAL SINGAPORE TRUST (USD) ACC","SG9999002406.SGD":"利安新加坡信托基金","SG9999014302.SGD":"RHB Singapore Income Fund SGD","SG9999006597.SGD":"United China-India Dynamic Growth SGD","SG9999000343.SGD":"Schroder Singapore Trust A Dis SGD","SG9999013478.USD":"利安新加坡股息基金","F34.SI":"丰益国际","SG9999013486.USD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (USD) INC A","SG9999016042.SGD":"Schroder Singapore Trust A Acc SGD","SG9999003826.SGD":"日兴资管新加坡股息基金 SGD","SG9999014492.USD":"NIKKO AM ASEAN EQUITY \"A\" (USD) ACC","SG9999002679.SGD":"LionGlobal Singapore Balanced SGD","BK6509":"食品和饮料股","SG9999014484.SGD":"Nikko AM ASEAN Equity Fund A SGD","SG9999004360.SGD":"Nikko AM Shenton Thrift Fund SGD"},"source_url":"https://simplywall.st/stocks/sg/food-beverage-tobacco/sgx-f34/wilmar-international-shares/news/the-returns-at-wilmar-international-sgxf34-arent-growing","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2449241332","content_text":"What are the early trends we should look for to identify a stock that could multiply in value over the long term?  In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing.  This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns.    In light of that, when we looked at Wilmar International (SGX:F34) and its ROCE trend, we weren't exactly thrilled.     Understanding Return On Capital Employed (ROCE)  For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business.  The formula for this calculation on Wilmar International is:  Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.068 = US$2.2b ÷ (US$62b - US$30b) (Based on the trailing twelve months to December 2023). Thus, Wilmar International has an ROCE of 6.8%.  On its own that's a low return on capital but it's in line with the industry's average returns of 7.4%.   View our latest analysis for Wilmar International SGX:F34 Return on Capital Employed July 5th 2024 Above you can see how the current ROCE for Wilmar International compares to its prior returns on capital, but there's only so much you can tell from the past.  If you'd like, you can  check out the forecasts from the analysts covering Wilmar International  for free.  How Are Returns Trending?  There are better returns on capital out there than what we're seeing at Wilmar International.   The company has consistently earned 6.8% for the last  five years, and the capital employed within the business has risen 41% in that time.   Given the company has increased the amount of capital employed, it appears the investments that have been made simply don't provide a high return on capital.     Another thing to note, Wilmar International has a high ratio of current liabilities to total assets of 48%.  This can bring about some risks because the company is basically operating with a rather large reliance on its suppliers or other sorts of short-term creditors.   While it's not necessarily a bad thing, it can be beneficial if this ratio is lower.    What We Can Learn From Wilmar International's ROCE  In conclusion, Wilmar International has been investing more capital into the business, but returns on that capital haven't increased.       And investors may be recognizing these trends since the stock has only returned a total of 0.9% to shareholders over the last  five years.  So if you're looking for a multi-bagger, the underlying trends indicate you may have better chances elsewhere.      One more thing: We've identified   3 warning signs  with Wilmar International (at least 1 which is a bit concerning)  , and understanding these would certainly be useful.    For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity. Valuation is complex, but we're helping make it simple.Find out whether Wilmar International is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.Valuation is complex, but we're helping make it simple.Find out whether Wilmar International is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":0,"commentSize":1,"repostSize":1,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.26.3","shortVersion":"4.26.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2449241332"}